Centrella’s home on Gilbert Avenue in Winsted, where he was arrested by state police on Friday.
Register Citizen File Photo

WINSTED >> Former Winchester Finance Director Henry Centrella was arrested by state police on larceny charges Friday. He is accused of stealing more than $2 million from taxpayers to fund his gambling and a double life of extravagant spending on a Florida mistress he had promised to marry.

According to court affidavits, Centrella had a mistress in Florida he was engaged to in 2009. According to the warrant, she said Centrella was looking into purchasing two homes there around that time. The values of those homes ranged from $700,000 to $1 million. No such homes were ever purchased.

His mistress told State Police Det. Michael Fitzsimons that Centrella said he acquired the money from 88 acres of land he sold to Disney World and Google stock.

“He spared no expense and likes how people looked at him when he said he would pay in cash,” she told police, adding that the amount of cash he carried on him made her nervous.

Though he was still married to his wife, Gregg, Centrella prepaid for the wedding to his mistress in Florida in October 2009. She said he paid for the wedding, a custom dress, and flights for all of her friends and family. Later, he postponed the wedding because of his health. He told her he was diagnosed with prostate cancer.

Aligning with the timing of the resignation letter he submitted in the fall of 2012, his mistress, who was not identified in the warrant, said he told her he was retiring soon and would join her shortly in Florida.

The affair ended in March of this year, according to police, after she visited Centrella in Winsted and discovered he was still married.

Gregg Centrella told police that she still lives in their home on Gilbert Avenue, however, she has not spoken to Centrella in months. She said that Centrella handled all of the finances of the home and, to her knowledge, no large sums of cash entered the home. She declined extensive questioning.

Centrella was taken into custody at his home on Gilbert Avenue. He was processed at State Police Troop L and was transported to his arraignment at Litchfield Superior Court Friday afternoon. He was charged with five counts of first-degree larceny. Each count can carry up to 20 years in prison and $15,000 in fines. The case was continued until Oct. 8, and no plea was entered in the case Friday.

Centrella appeared in court wearing khaki shorts, a blue polo shirt and white athletic sneakers, his hands cuffed in front of him.

During his arraignment, the bond commissioner recommended that Centrella be released on a promise to appear because of his long-time residency in Winsted, and because he lives there with his wife and children.

State’s attorney David Shepack argued against the bond reduction, saying Centrella, “was able to manage and conceal the embezzlement the state alleges, of well over $2 million.”

Shepack called Centrella’s connections to Winsted “fragile” and said the five counts of first-degree larceny Centrella was charged with were a “significant criminal exposure.”

“There is certainly an element of breach of public trust,” he said. “These charges do give the defendant a reason to flee. The warrant lays out that he has significant ties to Florida.”

Judge James P. Ginocchio ruled that Centralla’s bond would remain at $100,000 “due to the seriousness of the charges, the strength of the state’s case, the allegations and the ties to Florida.”

Centrella was fired in January after 35 years as the town’s finance director. He was the only person to ever hold that position in the town. Centrella had been placed on leave in November 2012 after officials uncovered accounting irregularities.

Detectives from the state police Western District Major Crime Squad began investigating Centrella on Jan. 18 after receiving a complaint in 2012 about discrepancies in the town’s financial records.After conducting numerous interviews and collecting evidence with the help of a forensic accounting firm, detectives found that more than $2 million was unaccounted for between January 2008 and November of 2012, according to state police.

“I have offered to assist Henry in the past with deposits, such as when he was on vacation or out of work for days at a time, and Henry would refuse.” Colleen Garrity, who has served as the assistant finance director since December 1997, was quoted saying in an affidavit filed with the court. “When Henry was out of work, he would just tell us [members of the finance department] to place the incoming money in the file cabinet or lock it in the drawer and he would deposit it later.”

Garrity said Centrella was known to prepare bank deposits at night. She also said that on occasion, Mark Douglass, who works in the purchasing department, would bring money, checks and deposit slips to Centrella’s home.

Among other things, Garrity said she believes Centrella prepared deposits slips from the tax office, which he was not authorized to do. She said he would take the money from the sealed plastic bags and “supplement the cash with accounts receivable checks and secure it into a new plastic bag.” A number of these secure plastic bank bags were found in his desk after he was terminated. Garrity said there was “no reason” Centrella should have been in possession of the bags.Fitzsimons, of Western District Major Crimes, has affidavits from five of Centrella’s co-workers. Each commented on Centella’s inappropriate cash-handling.

“I never understood why Henry would do this from his house,” Douglass said. “And at times I felt uncomfortable about it, however, Henry was my supervisor.”

The 25-page arrest warrant details the execution of more than one search warrant on Centrella’s home. During one of the searches, officers seized Centrella’s inflated W-2 forms, “numerous gambling records,” and bank records of checking and money market savings accounts. According to those records, in January 2008 the combined total of the accounts was $380,000. By December 2012, the time Centrella was put on leave, the accounts totaled $21,000.

Upon examination of the accounts, detectives noted “These unknown cash deposits do not include known wages earned that are deposited via direct deposit nor does it include known gambling winnings.”

Detectives also found that Centrella may have ties to real estate in Florida - the value of which totals nearly $900,000.

In addition to the criminal charges, Centrella is being sued in civil court by the town, which is attempting to recoup the funds that Centrella allegedly misappropriated.

Town Attorney Kevin Nelligan filed the lawsuit against Centrella, and Centrella’s wife, Gregg, in early July in Superior Court. The town is seeking up to $7.5 million in damages.

On July 29, Centrella appeared in civil court with his attorney, Robert Dwyer. Both declined to comment on the case. Centrella and the town agreed to a prejudgement remedy that froze Centrella’s assets and ordered him to disclose financial documents within 60 days.

In the agreement, town officials agreed not to pursue a civil case before any criminal proceedings are completed. The agreement requires disclosure of Centrella’s assets within 60 days, but agrees not to repossess his home, cars, or garnish his pension.

Winsted Town Manager Dale Martin said the prejudgment remedy will also prevent Centrella from collecting the accrued time he earned while working with the town.

Centrella’s accrued time has been an on ongoing issue for the town since he was hired in 1977. Over the course of his employment, several town managers urged him to stop working overtime in an effort to accrue comp pay.

Centrella regularly requested to be compensated for his overtime, though management continuously sent him, and other employees, memos stating that workers outside of a union will not be paid for overtime work. Centrella was not a union worker.

Along with his frequent requests to be paid for what the current finance director, Robin Manuele, has called and “unrealistic” amount of overtime, Winsted officials are also looking into a W-2 tax scheme that yielded the former director more than $187,000.

During a July Board of Selectmen meeting, Nelligan said that over the course of the last five years, large amounts of cash went missing from the tax office. The money was taken before it had been deposited into the town’s accounts. The missing funds do not effect tax payments made by Winsted residents.

In the fall of 2012 the money reappeared in the town’s account deposits that amounted to less than $10,000 each. Nelligan believes the small deposits amounts were so to avoid red flags. Together, the deposits totaled more than $60,000.

Nelligan referred to the loss of cash as an “inordinate amount of small change,” and said that all town employees were “working diligently” to help investigate their former coworker.

The town currently has two insurance claims in progress. Nelligan says a pay out of the claims will cover some of the town’s losses.

Though it began this fiscal year with a nearly $2.5 million cash shortfall, town officials say that number shrank to little more than $1 million. This shortfall has had ramifications that extend beyond the walls of Town Hall and has become evident in the town’s failing infrastructure, the BOE’s inabilities to pay its creditors, and the town’s unpaid bills amounting to $1,224,828.The town’s persisting financial crisis has led to Moody’s Investor Service downgrading Winchester’s bond rating. Since the first downgrade on June 27, Winchester underwent a second downgrade and a complete withdrawal of its rating. According to Robin Manuele, the town’s current finance director, this action will have no immediate affect on the town. However it may hurt the towns chances of bonding in the future.

Blum Shapiro, the firm that executed the audits into Centrella’s record’s, has so far only examined the town’s financial records dating back to 2008.

“I just don’t understand how this thing could have gone one for so long,” said Bob McCarthy, co-owner of Kelly’s Kitchen on Main Street. “It’s the sheer incompetence of our local government for this to have been going on for so long.”

McCarthy is a resident, business owner and taxpayer who, like many residents, feels he has been cheated.

“I know it’s innocent until proven guilty,” he said. “But I think he did it.”

Confidence in the town’s ability to take action and identify issues is lower for many residents.

“It’s time to let the process take its course,” said Philip Allen, Winsted native. “I hope that it all moves quickly.”

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About the Author

Reporter Mercy Quaye covers statewide breaking news for The New Haven Register, The Middletown Press, and The Register Citizen. Reach the author at mquaye@registercitizen.com
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